Official Reason for his suspension
The suspension was announced through a statement issued by Willie Bassey, the Director of Information for the Secretary to the Government of the Federation.
- According to the statement, the action was taken in light of “ongoing investigations into the CBN Governor’s office and the planned reforms in Nigeria’s financial sector.”
- Tinubu had also mentioned in his inauguration speech that the central bank needed a “house cleaning” a clear signal that there was intention to remove the central bank governor.
Controversial Policies under Emefiele and why he may have been removed?
Whilst the official narrative of the government was that his removal was due to ongoing investigations in the office of the central bank, there were no further details explaining what the investigations were about.
- However, sources suggest the CBN Governor had been singled out for investigations over several policies that were implemented during his time as CBN Governor.
- Some of Emefiele’s critics point to his personal beliefs against free markets as the reasons for some of his heterodox and unpopular economic policies.
- They claim this posture may have been the reason why he so often aligned frequently with the Buhari administration who as president also believed in keeping a fixed exchange rate and giving our cash handouts to the poor.
Under Emefiele’s 9 year tenure, the central bank experienced several controversial policies that got his critics riled for years. These are some of the notable ones.
Naira Redesign – One of the major issues contributing to Emefiele’s suspension is believed to be his handling of the naira redesign policy.
- This policy aimed to enhance the security features of Nigeria’s currency and tackle the menace of counterfeiting.
- However, it was marred by allegations of mismanagement and poor implementation, drawing significant criticism from both experts and the public.
- The controversy also reached a boiling point when APC Governors led by Nasir El Rufai took the matter to the supreme court, and eventually won a judgment that forced the central bank to extend the naira redesign to December 2023.
- He is also thought to have stepped on many toes of surrogates of the then-presidential aspirant Bola Tinubu.
Attempted Presidential Bid – Emefiele’s failed attempt to launch a presidential bid has added fuel to the fire.
- Speculations surrounding his political ambitions raised concerns about his dedication to his role as CBN Governor.
- Critics argue that his focus on personal aspirations may have hindered his ability to effectively carry out his duties, eroding confidence in his leadership.
- Emefiele even went as far as going to court to get an order confirming his eligibility to run for office. Though he eventually did not run for office, the damage had already been done.
Handling of Forex Policies – If the naira redesign policy contributed to a downfall of his approval ratings in the eye of ordinary Nigerians, his controversial handling of Nigeria’s exchange rate policy got him low marks amongst the financial and business class.
- Under Emefiele, Nigeria also experienced the widest exchange rate disparity between the naira and dollar falling to as high as N305/$1.
- Despite the initial success of the Investor and Exporter window, Covid-19 forced Emefiele to abandon the working of that market, disallowing the markets to determine the price as he preferred an exchange rate that differed from reality.
- This further drove out foreign investors meaning Nigeria recorded one of the lowest capital importation figures under his tenure.
- Capital controls meant businesses could not access dollars to fund transactions and foreign companies struggled to repatriate their forex balances. There are also accusations that he reneged on forex swap deals damaging investor confidence in the country.
- He also rationed forex for personal and business travel allowances and limited spending on naira and dollar cards approved. These were all in a bit to control forex demand, which many thoughts were a wrong move.
The current president also mentioned a “house cleaning” at the central bank which points to some of the so-called “heterodox” policies implemented under Emefiele.
Ban on 41 Items– Another controversial policy aimed at controlling forex demand was the ban on 41 items, which prohibited access to foreign exchange for the importation of certain goods.
- This policy aimed to promote local production and protect domestic industries.
- However, it drew criticism from businesses and consumers alike, as it led to shortages, price hikes, and disruptions in the supply chain for essential goods.
- Many argued that the ban disproportionately affected small and medium-sized enterprises (SMEs) and hindered economic growth in the long run.
Ban of BDC – Another notable policy was the ban on Bureau de Change operators (BDCs), which are licensed entities that facilitate the exchange of foreign currency.
